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NEW YORK (TheStreet) -- Shares of Netflix (NFLX) - Get Netflix, Inc. Report are gaining by 7.60% to $121.11 in late afternoon trading on Tuesday, after Guggenheim Securities initiated coverage on the TV and movie streaming service with a "buy" rating and a price target of $160, the highest of any firm covering the stock, Bloomberg reports.

The analyst's 12-month price target shows confidence in the stock, which has climbed along with its subscriber base, Bloomberg added.

"Netflix is based on a sound concept: Utilize improvements in technology to better entertain consumers in an efficient manner at an attractive price," the firm said in an analyst note.

"The stock's performance has been very strong over the past two years, yet at $48 billion in market capitalization, we still see a significant gap between equity value and ultimate intrinsic value of the service," the note continued.

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Netflix, which split 7-for-1 in July, will begin service in Japan on September 2 and in over 100 new countries in 2016, Bloomberg noted.

Separately, TheStreet Ratings team rates NETFLIX INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NETFLIX INC (NFLX) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NFLX's revenue growth trails the industry average of 33.3%. Since the same quarter one year prior, revenues rose by 22.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for NETFLIX INC is currently very high, coming in at 84.02%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 1.60% is above that of the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Internet & Catalog Retail industry and the overall market, NETFLIX INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: NFLX Ratings Report